Contracts and company law essentials in the United Kingdom

Why English law

English law is chosen for international contracts because its case law is deep, its courts are experienced with foreign parties and a choice of English law and jurisdiction is respected under the retained Rome I rules and the Hague Choice of Court Convention. London arbitration under LCIA or ICC rules is common. Mandatory rules still apply regardless of choice, notably employment law, consumer protection and the Commercial Agents Regulations, which give self-employed agents compensation or indemnity on termination that cannot be excluded. LegalMatrix products cover England and Wales; Scots law and Northern Ireland differ in places, including on deeds and share transfers.

Signing: simple contracts and deeds

Section 7 of the Electronic Communications Act 2000 and the retained eIDAS Regulation make electronic signatures admissible and effective, and the Law Commission confirmed in 2019 that an electronic signature can validly execute most documents, including deeds, provided any witnessing requirement is met with the witness physically present. Remote witnessing by video is not valid for a deed. A company executes a deed under section 44 of the Companies Act by two authorised signatories (directors or the secretary) or by one director in the presence of a witness; a seal is optional. Wills keep the Wills Act 1837 formalities, and HM Land Registry accepts only specified forms of electronic signature for registrable dispositions.

Exclude the Contracts (Rights of Third Parties) Act 1999 as a matter of course, and draft exclusion clauses with the Unfair Contract Terms Act 1977 in mind. Where personal data is involved, the UK GDPR and the Data Protection Act 2018 require processor terms with the mandatory Article 28 content and, for transfers outside the United Kingdom, the international data transfer agreement or the UK addendum to the EU standard contractual clauses; the Information Commissioner's Office publishes both.

Companies Act 2006: duties, approvals and registers

Directors' duties are codified in sections 171 to 177: act within powers, promote the success of the company, exercise independent judgment, exercise reasonable care, skill and diligence, avoid conflicts, refuse third-party benefits and declare interests. Ordinary resolutions pass by simple majority and special resolutions by 75 per cent; private companies use written resolutions. Two approvals are routinely needed for equity work: authority to allot under section 551 (unless the company has one class of shares and no restriction in its articles) and disapplication of statutory pre-emption rights under section 561 for cash issues. Unfair prejudice petitions under section 994 are the minority's main remedy.

Shares are transferred by stock transfer form, stamped where consideration exceeds GBP 1,000 (0.5 per cent, stamped electronically by HMRC), approved by the board under the articles and entered in the register of members. The register of people with significant control is public and PSC changes are filed within 14 days. The Economic Crime and Corporate Transparency Act 2023 introduced identity verification for directors and PSCs through Companies House, mandatory from late 2025; check the authority for the current position.

Employment: notice, probation and restraints

Statutory minimum notice from the employer is one week after a month's service, one week per complete year from two to twelve years, and twelve weeks at twelve years or more; contracts usually provide more. Probation is contractual, typically three to six months. The Employment Rights Act 2025 phases in changes through 2026 and 2027, including to the unfair dismissal qualifying period and a statutory approach to initial periods of employment; check gov.uk for the commencement timetable before relying on a short qualifying period.

Post-employment non-competes are enforceable only where the employer shows a legitimate interest and the restraint is no wider than reasonably necessary; three to six months is typical and twelve months is reserved for the most senior. There is no statutory cap at the review date. A 2023 proposal to cap non-competes at three months was not implemented, and in October 2026 the government announced its intention to legislate limits on non-competes and related restrictive practices; the detail was expected in the Budget. Garden leave and non-solicitation remain the dependable tools.

EMI and other equity

Enterprise Management Incentive options give tax-advantaged treatment to employees of qualifying smaller companies, subject to limits on gross assets, headcount and the value of options granted. The company agrees a valuation with HMRC, adopts plan rules and option agreements, grants within the limits and notifies HMRC within the statutory window. Company Share Option Plans suit larger companies, unapproved options cover everyone else, and growth shares with a section 431 election are used for executives. Each needs section 551 authority and pre-emption disapplication, and consent under any shareholders' agreement.

Trade marks at the UK IPO

The United Kingdom is first to file and quick: approximately three to four months from application to registration if no objection or opposition arises. Applications are published for a two-month opposition period, extendable to three by a notice of threatened opposition. Registration lasts ten years from filing and is renewable, and a mark unused for five years is exposed to revocation. From 1 April 2026 the online application fee is GBP 205 for one class and GBP 60 for each additional class, with renewal at GBP 245, the first increase since 1998. EU trade marks no longer cover the United Kingdom, so a brand active in both needs two filings or Madrid designations of both. An address for service in the United Kingdom, Gibraltar or the Channel Islands is required.

Checklist

• Witness deeds in person, even when signing electronically.
• Check section 551 authority and section 561 disapplication before any allotment.
• Verify directors' and PSCs' identities with Companies House.
• Keep non-competes short and expect legislation.
• Budget for the April 2026 UK IPO fees and file UK and EU marks separately.